Random expressions of a Wannabe

Economy

Back to India after a week’s trip from Trump land, one cannot escape the palpable political weather in both the countries. Large parts of the US may be freezing due to the polar vortex but politically, the climate is hot in the US as in India. While India is already in the grip of election fever with the Lok Sabha polls just couple of months away, in the US, presidential elections are due in 2020! Even then, the political chatter is all about if Donald Trump will get re-elected or not! Same is the question in India with Narendra Modi!

Ever since Modi, a rank outsider to what is now infamously called as the Lutyen’s Delhi, became the Prime minister of India in 2014 and Trump more famed as an “Apprentice” politician and a real estate baron became the President of America, comparing both these leaders and bringing out the similarities in them have been favourite pastimes of the commentariat. Probably rightly so! Here are two leaders who have defied many established conventions to chart their own course in governing their respective countries. The similarities in their methods and more importantly the narratives around the personalities are difficult to ignore.

In terms of the evident similarities, the liberal media’s scorn in India and the US for Modi and Trump respectively comes first, I guess. For example, all through the time I was in the US, TV news was engulfed by the Government Shutdown due to a budget fight centred on Trump’s demand for $5bn to fund a wall along the US-Mexico border. On TV, the built up narrative showed Trump as the central villain for bringing America to such a crisis. Images and clips of federal employees suffering due to loss of pay dominated most of the screens. In California where I was during that week, on the streets, it was business as usual! I can compare this to the narrative which was played up during Demonetisation in India. Of sufferings, deaths and what not. However, in election after election in the aftermath of Demonetisation, BJP swept the polls! Not surprisingly both Modi and Trump treat the main stream media with contempt. Trump calls channels as Fake news generators, Modi calls them ‘Bazaaru’ media! And therefore, they prefer to engage with the public more actively through Social media.

The other point of convergence is their response to border security. Trump has been vocal about constructing the wall along the Mexico border to prevent illegal migration into his country. In India, along the North East, the introduction of the Citizenship (Amendment) Bill by the BJP is touted as a similar action to deal with illegal migration from Bangladesh. Likewise, both Trump and Modi during their respective campaigns had raised alarm over worldwide Islamic terror without beating the bush.

Yet another commonality in Trump and Modi is their approach to external affairs. It is said that Modi being a Gujarati always brings a sense of ‘Dando’ (business) to the table. In the case of Trump too, we have seen so far that he has been running the United States of America as another Trump Corporation! Again, in the context of External affairs and diplomacy, historical legacy and precedents have not come in the way of taking bold initiatives for both Modi and Trump. For example, in India, while we have always treated Israel as our friend for so many decades, Modi has been the 1st Prime Minister to make a historical visit to Israel and set the optics right. Rubbing our friends in the Gulf on the wrong side – a historical reason for not taking our friendship with Israel to the next level was set aside by Modi. Similarly in the US, Trump has been brazenly demolishing some legacy diplomatic hangovers like supporting Pakistan with aid even when it was not doing anything on curbing terror. There are few other examples as well like seeing China into its eye and not withholding the import curbs.

And the other thing I noticed which is quite common in the case of both Modi and Trump is this. While seeing what is said about these two in the media one may get an impression that they are steadily losing ground and are grossly unpopular. However, the reality may turn out to be different. In the US, I noticed that calling yourself a supporter of Trump can make you a social untouchable and therefore, people tend to stay quiet rather than expressing themselves. Like my friend said, he was routinely derided by his pals for riding a “Triumph” bike mistaking it for a “Trump” bike! Similarly in India, seeing the narrative in main stream media, an outsider can get an impression that Modi Is finished and his popularity has hit rock bottom. Those of us with ear to the ground know that the truth is far from that!

Beyond these, there could be more meeting grounds as well for Modi and Trump! Like they are both eternally on “Campaign” Mode”! So, while it is very tempting just to draw parallels between Trump and Modi and call it as the beginning of a new era in political personalities, I do feel that there is a need to pause here. I think beyond the veneer of similarities between Modi and Trump, I do feel that never the twain shall meet for many reasons.

Like, while Modi and his office are active on social media, you can never find one politically inappropriate tweet from Modi. In the case of Trump, we have to search for one which is not!

Though Trump has been active in his direct communication through Social media, he has still respected the traditions of giving interviews and doing press conferences regularly. Modi, on the other hand, has shown high contempt to main stream media and has not addressed one presser since he took office. He has been quite stingy on giving personal interviews as well. His Man Ki Baat can be deciphered by the people through the radio and not through the mouths and writings of journalists!

Unlike Modi, I must say that Trump has shown more commitment to the promises he made during his campaign. Right or wrong, he has been diligently ticking off the promises he made one by one whether it is corporate tax reduction, steps to prevent illegal migration and so on. I would say that his stand on the Shutdown was another visible demonstration of his commitment to his manifesto. In the case of Modi, it has been a case of “Glass half empty”.

On the question of jobs, Trump has a better record to show certainly. A recent report said that US created 304,000 jobs against 170,000 expected just in January smashing all expectations. In India, the question of job creation is a mystery with no clear answers. As Swaminathan Anklesaria Aiyar points out in his Sunday TOI column, “An employment crash of the catastrophic sort indicated by the NSSO and CMIE typically occurs only in terrible, deep economic depressions. But India has been averaging over 7% GDP growth, and is the fastest-growing major economy in the world. Never in history has a miracle economy, growing at over 7%, witnessed a collapse of employment.”

A big difference between Modi and Trump has been the way they handle their teams. In India, Modi has his own handpicked team in his PMO. Most of them are from his erstwhile Gujarat cadre or with a stint in Sangh parivar backed Vivekananda foundation. They have stayed with him so far and we have not seen any public dissent against Modi. However in the case of Trump, we have lost count of his team members who have either quit or got fired! I don’t think any of the original staunch supporters of Trump are still sticking to him in his close circuit. I don’t think Modi will fire a subordinate over Twitter!

Another important point to add here is the influence of the family. In the case of Modi, his family has been kept at a far distance with no one occupying any real or virtual posts of power. In the case of Trump it is exactly the opposite. His daughter Ivanka and son in law Jared Kushner have been in the thick of policy making. Morality around conflict of interest has been thrown out of the window. And this I feel may return to haunt Trump for a long time when his term gets over!

I mentioned earlier about what the common public thinks of these leaders. Even the staunchest opponents of Modi would not venture to label him as a clown. But, in the US, calling Trump names – “Clown” and “Joker” being popular in that is uber cool! Similarly, Trump’s earlier escapades with women have routinely surfaced in regular frequency to embarrass him. Modi has a clean record on this score.

Above all, if there is going to one lasting difference between Trump and Modi, it is going to the legacy they leave. In today’s business parlance, “Disruption” is a virtue and “Disruptors” are visionaries. However, Trump as a disruptor is likely to lead America to paying some heavy price in the future. Many of his moves though in the short term have paid dividends politically and are seemingly smart for America today, may not be, in the long term. In that sense, I reckon that the legacy he leaves may be of the disruption in the real sense. On the other hand, Modi has been very circumspect in disrupting anything. He has believed in what I call as “Improved continuum”! I believe for a country like India, his legacy may be a more positive one. From that point of view, I do feel that talking of Modi and Trump in the same breath may just be a good academic exercise and therefore “Narendra Damodardas Trump” may just be a good click bait title for a blog. Just.

As 2018 winds down and we step in to 2019, for India, it is just not another new year. Mid of 2019 is when we will have the Lok Sabha polls that will determine if Narendra Modi will get another shot at being the Prime Minister. In my memory, I cannot recall of any individual who has come for so much scrutiny as an elected representative. And whose re-election is being discussed and debated so intensely in the country. First up, blame it all on the social media and its growing tentacles!

The fact that a government’s performance is coming up for such a rigorous appraisal itself, augurs well for our country. It should be like that. I only hope that this appraisal business isn’t selective and not just reserved for Modi Sarkar! If I think as to why this government has come under such a close assessment, I realise that it should blame itself for the same.

Did we have any other government in the past that

Set targets for itself on many fronts?

Which announced the targets and put them out in public domain?

Which tracked the actual delivery against the targets and presented them for everyone to see and comprehend easily that too mostly on real-time basis?

Today we know, not just what this government’s targets are for rural electrification, construction of highways, building targets, opening of bank accounts so on and so forth but also where it stands in terms of achievement. One look at the https://transformingindia.mygov.in/performance-dashboard/ site gives us an update on a real-time basis. It is not that governments in the past did not set targets for themselves. But all these targets were usually in terms of outlays announced in the Annual Budget speeches and seldom one would know what the final outcomes were. Between the outlays and outcomes, the India story remained in tatters. I guess not any more. So, if people keep remembering the promises made and get disappointed if some of the promises have not been met fully or adequately, blame it on the Government’s efforts of putting out data in the open which makes it possible to compare achievements Vs goals easily.

In comparison to the upbeat mood in 2014 and 2015, today the mood in the country is more sombre. Even the most loyal fans of Modi have realised that probably he chewed more than what he could swallow. Five years are just not enough to turn around and solve all the ills of the country. That too when the global economy is facing one headwind after another! But then, as a country we had our own share of misses. Right when the economy was getting back on track in 2015/16 from the throes of policy paralysis and negative vibes and was poised for a leap, this government let loose the Demonetisation devil on the economy. This set the economy back by 2 years to get back on track. That we didn’t fully collapse and managed to grow the economy at a slower pace nevertheless, would be a miracle, academicians would pore over in the years to come!

Before the effects of Demonetisation could subside, this government went ahead with the introduction of GST which according me is the biggest Tax reform in Independent India. Irrespective of the critics who take on this government on the “not so perfect” GST, I maintain that it was extremely creditable on the part of Modi Sarkar to launch the GST without further delaying, on the 1st of July 2017. In India, in aspects of meeting deadlines, we Indians follow religiously and rigorously the Theory of Elasticity which says solid materials deform under the application of external force and regain their original shape when the force is removed. So, in the quest of a perfect, ideal GST, if this government had deferred the launch, who knows, perhaps we will still be talking of “introducing the GST” in the upcoming budget! Against that, today we already have a thriving GST which is now going to complete 2 years! The introduction of GST will remain this government’s biggest achievement when its history is written.

The short term pains inflicted by these 2 moves (Demonetisation and GST) to the small and medium businesses combined with the government’s failure to address the Banking crisis at the beginning of its term have led the BJP to the situation where it is today. In its strong hold states like Gujarat, Madhya Pradesh, Chhattisgarh and Rajasthan, the party’s support base has been dwindling. On the contrary, the Congress which seemingly had no hope of a revival till mid-2017, has smelt blood and is hoping to deprive Modi of a second term and a shot at history.

In India today, in the main stream media and also probably social media, the obituary of ModiSarkar is being written on a daily basis. As per me, it is too early to write off Narendra Modi in the context of 2019. In spite of his government’s misses in terms of promises and more importantly the delivery of Achhe Din, his personal credibility as a leader who is keen to deliver, is intact. I do believe that there are those who are disappointed with him. But they are still not disgusted with him. Yet. My personal feeling is that they would like to give him another chance. The same states which voted out the BJP recently could very well see voting for Modi in the Lok Sabha polls!

Apart from this factor of Modi’s personal charisma, there is another important factor at play. People like to call it the TINA (There Is No Alternative) factor. I don’t believe that there are no alternatives to Modi. In fact, we have many. We have the spectre of a Rahul Gandhi becoming the Prime Minister, if a Congress led UPA front emerges as the biggest. Or else it could be toss between a Mamata Banerjee or a Mayawati or a Chandrasekhar Rao or any other leader depending upon how many seats they win, as part of a coalition which will be cobbled together post the elections. In all these cases, a leader of the party with 30-40 MPs would head the coalition of 10-15 parties with each party playing the “I am indispensable” card!

This Mahagathbandan where, parties will oppose each other in one state but will come together in another state is only a Maha”cut”bandhan who want their share of power and the perks that come with it. I believe that people are smart enough to understand and realise that Modi Sarkar might have disappointed but will still probably vote for him not because of TINA but being weary of TAIL – The Alternative Is Lousy!

In the past, we saw many Accidental Prime Ministers as we didn’t sight TAIL properly! Hope 2019 is different. On that hopeful note, wishing India a momentous 2019!

Last week, parts of a speech of our National Security Advisor, Ajit Doval made headlines. Speaking at the Sardar Patel memorial lecture, Doval said that India needs a strong, stable and decisive government for the next 10 years. He also predicted that weak coalitions will be bad for India.

While I was reading this, I was reminded of another speech made by Y.V.Reddy, Former Governor of RBI some time in 2017. “Interestingly, the highest growth in India from 1990 to 2014 was really during coalition governments… So, in a way it is consensus based… in Indian situation, a coalition probably produces better economic results than a strong government,”Mr. Reddy told a Washington audience on September 27.

From the two specks of wisdom, we can assume that while the former spoke from security point of view, the latter did from economic point of view. While I don’t remember many reactions to Y.V. Reddy’s opinion then, Doval’s speech has triggered a lot of rebuttals, primary one being, this piece from The Print’s Shekhar Gupta where he has argued that majority governments in the past including that of Rajiv Gandhi’s in the 80’s and the present one of Narendra Modi have not been better off significantly than the few coalition governments we had in between!

Without going back too much back in time, I would like to focus on the present majority government of the BJP in this post. By the evening of 16th May, 2014 when it was clear that BJP against all expectations and pre-poll predictions, was hitting the half way mark on their own, there was euphoria all around. Even among the non-BJP loyalists, there was visible excitement of how a majority government can decisively take the country forward without having to constantly look over its shoulders. By nature, coalition governments formed mostly through post poll alliances come with the spectre of instability. So, here was a government finally which had the numbers on its own and a two third majority with its allies. So, can’t blame the public at large including the author if they thought that Acche Din finally arrived for India!

In India, we have had a long history of taking one step forward and few steps backward. Unfortunately this did not change even with a single party government with a decisive leader at its helm as we found soon enough in 2014. We soon found that adequate majority in Lok Sabha is not enough and that the government needs numbers in Rajya Sabha also to be effectively called as a “true majority Sarkar”! And for that, the wait needed to be longer – another 5 years or so!

As per me, the virtues of a single party majority Sarkar got exposed when this government failed to get the amendments in the Land Acquisition Bill passed. In his 1st meeting with the Chief Ministers, Narendra Modi was reported to have got the feedback from most of the CMs (including of the Congress) that the tough and impractical clauses in the Land Acquisition Bill presented the single biggest challenge in getting many infrastructure projects off the ground. The government went about making changes in the provisions and tried to pass the bill. But couldn’t get the bill passed through in Rajya Sabha where the Congress and the Left blocked it effectively. The majority government then tried to use the Ordinance route many times but finally gave up, coming under the cloud of Rahul Gandhi’sSuit Boot Sarkar jibe! As we speak, in spite of this Government’s intent and drive towards kicking off many infrastructure projects, land acquisition continues to be the biggest impediment in meeting deadlines for large game changing projects!

Here, I feel that a coalition Sarkar of the stable type as NDA-1 run by Vajpayee or the UPA-1 run by Manmohan Singh, would have handled this differently. By engaging with the respective oppositions through dialogues and agreeing to give and take on a few provisions. Since many Congress CMs were on board on the changes to the Land Acquisition Bill, dialogues with the Congress party leadership through some of these CMs would have probably done the trick leaving the Left isolated on this. As we all know now, in the initial days of this government, its single point agenda was to isolate the Congress. What if the government had given the status of the Leader of Opposition to the Congress in the Lok Sabha as a quid pro quo to getting their support to a few important bills in the Rajya Sabha? Machiavelli or our own Chanakya would have been proud, isn’t it?

In spite of this initial setback though crucial, I do believe that the Modi Sarkar was flying high in that period. From bringing Swachh Bharat to national discourse to bringing back India at the top of investment destinations worldwide, Modi Sarkar could not make a single false move, but that was till November 2016! With the confidence in the Indian economy back and aided by windfall gains from low crude prices, one thought that the Universe was finally beginning to conspire to make India successful. Again that was still November 2016!

In November 2016, Modi Sarkar took on the Universe and went ahead with Demonetisation. What seemed a master stroke initially to suck out black money, soon turned out to be an ill-conceived and ill – executed move that set the economy back by a year or so. The much lauded ‘Jugaad’ mentality of Indians came to party, the result of which we could finally get to see. As much as 99.3% of the junked 500 and 1,000 rupee notes returned to the banking system!! While it is to the credit of the Prime Minister Narendra Modi that his government came out unscathed with its credibility intact or grown even after this very huge miss-step, I wonder if a major decision like this could have been taken without taking the coalition partners into confidence if it was a coalition government. And in the same token, I do feel that the collective wisdom of a coalition cabinet would not have let this move go at least without proper checks, balances and preparations!

I certainly would not add the introduction of GST as a miss-step of this government as many are doing, as I firmly believe that GST was a long-awaited reform and in the introduction of the same, Modi Sarkar learnt its lessons and behaved like a coalition government in listening to and taking all parties on board. The result is there to see. GST is a reality now and after initial hiccups as can be expected from any path breaking reform, the benefits are trickling down with the GDP showing clear signs of recovery in the past few quarters.

A majority government led by a decisive leader provides for great optics particularly from foreign countries’ point of view. And that has its own benefits as major powers would like to believe that the Government/leader they are engaging across the table has the backing of the popular mandate. However, in practice, I have now come to feel that a coalition government led by a party with a fair share of numbers led by a decisive leader may be ideal for a diverse country like India. In that, we do get the advantage of the collective wisdom of alternate views while, the virtues of the decisive leader are also not missed out.

Or going a step further, a majority government with a decisive leader which behaves like a coalition government by not taking key, strategic decisions without passing by the collective wisdom of alternate brains! In short, institutionalizing the “GST Introduction model” for all key decisions!

So going back to the speeches of Y.V.Reddy and Ajit Doval, both may be correct. In parts! Just that like in many aspects in India, the ideal situation may be somewhere in between!

The debate on privatisation of Public Sector Undertaking (PSU) banks has a habit of rearing its head in public discourse in India with regular frequency. Not so long ago, it was when the PSU banks were hit by the NPA (Non-Performing Assets) crisis embodied by the likes of a fleeing Vijay Mallya. Later, it was when the Government finally took a call on recapitalisation of the PSU banks last year. And now, it is when the Nirav Modi – PNB scam, the latest to hit the Indian shores (and shares) surfaced. Yesterday even Arvind Subramanian, the usually reticent Chief Economic Advisor has joined the debate!

Reformists are of the view that the Government is betraying Winston Churchill again and again who famously said that “Never let a good crisis go waste” in the context of biting the PSU bank bullet. They are of the view that the repeated crises which hit the PSU banks provided a plausible excuse and “Gem of an opportunity” (pun entirely intended) for the Government of the day to privatize PSU Banks and thereby get out of the rigmarole of using tax payer’s money to keep bailing them out. The underlying assumptions being that the PSU Banks are run usually inefficiently and being under sarkaari control are subject to pulls and pressures. While this is true for almost all PSUs in general, money being closer to the pocket and heart of the public, privatisation topic haunts the banks more. One cannot dismiss the very popular data point thrown in the above argument’s favour which is that the market cap of a relatively younger HDFC Bank which is privately held is higher than all PSU banks put together!

At the core of the argument against privatisation is of course the security it provides to the Aam Admi. Irrespective of what happens around the balance sheets of these PSU banks. The general public does believe that the Government will not let their savings go down the drain come what may. One remembers the furore and angst in WhatsApp groups recently when we were all told that our deposits above 1 lac are not safe if the banks go belly up. So, for any Government of the day, it is a minefield of a quandary to attempt privatisation of PSU banks unless it is completely politically immune to a public outrage and the after effects thereafter!

Be that as it may – the Government’s quandary I mean, the larger issue is the conflict bordering on hypocrisy in the minds of people like us which is – my direct stake in the bank by way of savings/deposits Vs my indirect stake in PSU banks by way of government’s stake which is in effect all our tax payer’s money. In short “My money” Vs “Our Money”! Nirav Modi has just swindled a government bank of few 1000 crores but that still is not “My money” though it is “Our Money! And largely our outrage has stopped with laughing out loud (or is it laughing like Renuka these days?) looking at jokes, memes and sarcastic jibes on the Government while a smart cookie has “been crying all his way to the bank”! I think as individuals we are more concerned about the safety and security of our savings which we feel is protected if PSU banks remain as is – Government owned. Even if that means

The Government of the day interfering in the day-to-day functioning

The Government mandating the banks to carry out populist programmes which may not make commercial sense but may make immense political sense to them

Mounting NPA’s due to favouring cronies of the likes of Vijay Mallya

The Nirav Modi kind of frauds due to conniving staff

Less accountability in the system.

At the end of the day, as along as the banks are Government owned, the only fix for all the above ailments is injecting more capital which is by tapping into tax payer’s money. It’s obvious that the same money if not used for bailing out banks could be put to use for better roads, power, water, electricity or even for that matter the proposed grandiose Health Insurance programme – stuff our country has been deprived of in the last 70 years since Independence.

The 1.6 billion dollar question is whether as tax payers and citizens we are okay and ready to let the government seize the opportunity and privatise the PSU banks? My guess is maybe we are not. And this stems from our socialistic belief that next to God, the Government is the savior and hence must protect us. And the constant fear associated with losing our money if not protected by the government.

In a country like ours which is evolving and is still a work in progress on many fronts like urbanization, education, social mobility,..,… the fear is mostly legitimate. Coupled with the fact that the private sector has not fully covered itself with glory. But the performance of the new private banks set up since the opening up of the economy in 1993, provide quite a lot of hope. For example, as far as we know, the new private banks are not part of the NPA problem. Even during the 2008 Lehman shock, when all over the world financial institutions were rocked and many went belly up, in India none of the banks including the private ones were affected so much (though banks like ICICI had exposures to the subprime crisis) due to very strong regulations in India. So, so far we could bank on these banks!

In summary, my point is may be if not all in one go, the Government could contemplate privatising PSU banks in batches of say 2 starting with the smaller ones. This will give adequate space to watch out for any pitfalls in the process and fine tune the same. This of course with the continued strong regulatory frame work in place. The smooth completion of the ongoing privatisation of Air India may give the much needed heft to the Government.

With may be all banks out of governmental control in the next 10 years, the frequent exercise of tapping into “Our Money” to protect “My money” may be a conundrum of the past. The moot question remains if this current “Gem of a scam” will be turned into a “Gem of an opportunity” by the Government and that we as public will let that pass!

Postscript: Overheard in a lift: “These jewelers kept telling us that Diamonds are forever. But, they never told us that loans are also forever! Saala vaapas hi nahi kiya!!!

It’s just about a week since the Annual Union Budget – supposedly the most important policy statement for any Government in power, was tabled in the parliament in India. In these days of extremely limited attention span, the news and noise around the Budget are already done and dusted. The media has already moved on from analyzing the Budget to debating if an MP’s loud cackle is acceptable parliamentary behavior and if the PM’s witty riposte to that, will pass the test of a Nehru or a Vajpayee in parliamentary decorum! The only remaining nugget about the Budget I see in the media in the last couple of days is, as to who won the TRP war on the Budget day! For the television media, the annual Budget presentation is another TRP generating event in the annual calendar and hence the whipped up frenzy and hoopla around it.

For the past 20 years, I have also been a victim of the annual cacophony called the experts’ analysis of the Budget and in the same breath, culprit in doing my own analysis and critique. Over the last few years, it started dawning upon me that slicing and dicing the Budget and trying to evaluate the same as good, bad or average is an exercise steeped in foolhardiness. And so, this year apart from a cursory look at the highlights in the evening of the Budget day, I spent little time in that direction.

This distancing has nothing to do with this year’s Budget and its contents but on the way “we”, as a country carry out the discourse around the Budget. When I say “we”, this includes the Government, the Opposition, the political parties, the media, the Industry, the commentators and folks like us. For years, I have been seeing that the reactions to the Budget proposals have become extremely predictable. The ruling party members give a huge thumbs up to the Budget and usually follow it up with head line making epithets. (Path breaking/Visionary,…) While the finance minister is presenting the Budget, any announcement of outlay which is seemingly bigger than that of last year is welcomed with huge thumping of the desks by the treasury benches. The Opposition parties usually criticize the Budget calling it Inflammatory (if taxes are raised), Anti poor (if subsidies are cut), “What about implementation?” (If outlays are increased) and so on! And for other political parties, the famous Mile’s maxim applies – “where they stand on the Budget depends on where they sit” in the parliament. The Industry usually in front of cameras always give a 12 out of 10 to any Budget! The media provides a ball by ball update on the stock markets as the Budget presentation goes on, as if the entire nation’s well-being depends on how the stock market reacts to the Budget on that day! And we all know that the stock market yo-yos on the Budget day, without proper understanding of the provisions and settles down few days later. The media commentators present a typically “On the one hand, on the other hand, having said that,..” analysis replete with clichés and Budget equivalent of Shastri’sms the next day in their columns. And with the advent of social media, Budget day in India is a Kaun Banega Economist? competition with you and me donning the hat of economists to hail/trash the Budget based on the outlay proposals and our own prejudices! All this repeated itself this year as well.

In the din, what is completely missed is an analysis and report of the outcomes of the previous year Budget outlays. Budget after Budget, finance ministers announce crores and crores for initiatives and programmes. But as a tax payer, we never get to know the outcomes of those outlays. 13 years after the then finance minister P. Chidambaram spoke of “outlays versus outcomes” in his Budget speech of 2005-06, no mechanism is still in sight to measure the same. Take for example one such announcement in the last year Budget, which I clearly remember. The finance minister had announced that allocation under MNREGA was being increased to Rs. 48,000 crore from Rs 38,500 crore which was meant to be the highest ever allocation in all these years. And this was supposed to provide rural jobs, alleviate poverty in rural areas by improving rural incomes and at the same time end up building assets as well. One year hence after this historically high outlay, maybe I missed, but do we know exactly know what happened to this Rs. 48,000 crores? And this is just one outlay. A regular Budget speech is replete with outlays like this and more.

Another glaring example is the Nirbhaya fund. Announced among thunderous thumping of desks in the 2013 budget by the then UPA Government following the heinous Delhi incident, over 90% of the funds remain unused. Does that mean that rapes against women have declined? This is a classic case of an outlay not yielding the desired outcome and still being provided for, year after year!

My disenchantment with the Annual Budget exercise stems from this gap. Of celebrating outlays without knowing what the outcomes were! In the finance minister’s Budget speech a review of the past year is usually limited to the GDP growth rates and projected fiscal deficits against the targets. Even these get revised when the actual numbers come out some time in May/June and very few of us take notice. The Annual economic survey does cover some of the trends but I don’t think even that covers specifically the results of the previous year’s outlays.

For a developing economy like India, we need more transparency. We should not be pushed to use instruments like RTI to just understand outcomes and expenditures! And hence here are my suggestions:

In the start of the Budget session, before the Budget for the next year is presented, have a day to present the outcomes for the previous year’s outlays. Tell the people what worked and what didn’t. This will help to justify increase or cut outlays for the next year.

Typically our parliament has 3 sessions. In these sessions, have each of the ministry provide an update on the progress of the initiatives, programmes, outlays and status of outcomes announced in the year’s Budget. If not for all, have this mandatory for all key industries.

In Delhi circles, I hear that this government of Narendra Modi is a “Dashboard” government. In the sense, the PMO expects weekly/monthly/quarterly dashboard on their ministry’s accomplishments from all the ministries. Why not extend this “Dashboard” governance to the parliament and get ministers to showcase their ministries’ performance to the people?

Even the media and the commentariat must devote time to analysing outcomes of previous outlays and bring it to the fore rather than just talking of the new outlays!

Thumping of desks by MPs and celebrating outlays on the Budget is passé. Aim must be to let people celebrate outcomes by voting for you at the hustings!!!

Tucked in between the noisy and newsy headlines in India in the last week around Love Jihad, Rahul Gandhi’s religion, Ivanka Trump’s costumes in Hyderabad and other inanities, was a poignant news bit about the Nano car. Poignant, because it said that dealers have stopped placing new orders for the car and in the month of October, just a measly number of 57 cars were shipped. And this led to political jibes from Rahul Gandhi that the PM’s pet ‘Make in India’ project just died. He also tweeted that Rs. 33,000 crore of tax payer’s money and that too of Gujaratis’ turned into ash. Coming in the midst of a vitriolic election campaign in Gujarat, one can excuse politicians for spicing up their speeches without looking at the larger picture. The point is taking potshots at Nano’s failure is taking potshots at India. Failure of Nano is not just a failure of Ratan Tata or the Tatas but a blot on India.

Cut to year 2008, when Nano was first launched, it was the biggest story of India Inc. ever. When Ratan Tata initially announced that Tata Motors is working on a Rs. 1 lac (US$2500) car, it was met with excitement and skepticism in equal measure. So, finally when Tata did launch the car with a price tag of Rs. 1 lac, the world did look up and notice. Finally, here was a car which was conceived in India, designed and developed by Indians with indigenous technology and manufactured in India that broke all cost frontiers unimaginable by car manufacturers till then. Overnight, Ratan Tata was the toast of the nation.

Around the 2008-10 time period, whenever I met any foreigner from Japanese to Americans, our conversations invariably touched upon the Nano car and how this was pulled off. And those visiting India always wanted to see a Nano car on the road and take a picture in front of one. Selfies didn’t exist then! The Chairman of a well- known Indian group who drove a Camry, proudly told me that he was the first among to book a Nano in Mumbai and to get delivery as well. At that time, Nano was yet to be seen in big numbers in Mumbai. But on a visit to Colombo in 2011, Nano had already captured the “Budget Taxi” space there. Media was full of interviews of not just Ratan Tata but also of the R&D engineers who had designed the Nano. Nano’s launch was the culmination of a series of stories in which India Inc. was part of then. It was believed that Nano would be a live case study for C.K. Prahalad’s“Fortune at the bottom of the pyramid” theory!

That was not be and the excitement around Nano soon started tapering. Unfortunate incidents of the Nano going up on flames on the road didn’t help at all. For a product which was expected to expand the car market by 65% or so, the sales was plateauing around 70,000 Units a year for 2-3 years before nose diving to what is a few hundred cars this year. The failure of the Nano car must be one of the most analyzed and discussed case study in B- Schools, I reckon. Most of what I have been reading, attribute its failure to the “positioning” of the car as the world’s cheapest car in the beginning. The Quality failures adding “fuel to the fire”. Attempts to re-position the car as a “Cool Urban car”,… didn’t help either. I have a different view on the reasons for the failure of the Nano car. But will keep that for another blog.

In business, they say there is no room for emotions and decisions need to be taken based on just commercial considerations. The ousted Chairman of the Tata Group, Cyrus Mistry recently said that during his time it was decided to pull the plug on Nano as it didn’t make commercial sense, after attempts to revive the project failed. As of now it hasn’t happened. The current Chairman Chandrasekhar has been more considerate, probably towing Ratan Tata’s emotional line. He has said that there is a need to take a more “holistic” view on the Nano project. And I tend to agree.

Nano was not a Tata story. It was and is an India story. Ergo, failure of Nano in a way is an indictment on the capability and potential of Indians. And as somebody said, “Nano was not an Idea. It was an ideology!” Ideas can fail. Ideologies need to linger! The failure of Nano soon opened up to “We told you so” and how can Indians pull it off” jibes. For a 3rd largest economy (GDP-PPP) in the world, India is yet to throw up globally renowned home ground brands. So far, it’s been the soft power brands like Ayurveda, Yoga, IIT and the likes which have been torch bearers for India globally. Let’s keep aside the Software brands like Infosys, Wipro,… aside for the time being. In one of my very early blogs (read here) on different styles of management, I had opined that for the world to recognise, acknowledge and adopt the “Indian style of Management”, we need stories of successful Indian companies and brands. Just like how the world adopted the American way or Japanese style when their companies were successful. And that opens the door for Indian companies, Indian products and we Indians in the global arena. Nano was uniquely positioned to be the 1st homegrown successful Indian product brand. There was an opportunity for India Inc. to have “arrived” in style. Not just that. Success of the Nano would have led to similar pushing of cost and design frontiers by other Indian companies in many other product categories. It would have opened the floodgates for Indian CEOs to apply the “frugal innovation” concept in other products. Hence my fervent hope that Nano should succeed.

So, when it failed as it has now, it has pushed back the India Inc. story by few years till we stumble upon the next Big Idea. In the meantime, Nano I believe, is slated to make a comeback in an electric avatar. Will this avatar help Nano to claim the position of “the common man’s car” in Indian market that Ratan Tata originally envisioned 9 years ago? The world in no longer watching it with the same excitement of 2008. Away from the arc lights, the original billion dollar opportunity still beckons!

A quote alluded to Ratan Tata says, “I don’t believe in taking right decisions. I take decisions and make them right!”Nano might have been a glaring exception to this. For Ratan Tata’s sake, Nano-II should set the record straight. For India’s sake too.

If there is one state in India, which has almost got its act together on tapping its tourism potential, it must be Kerala. I say, “almost” and mention Kerala in relation to other states of India. For a relatively small state, Kerala boasts of varied choices for a traveler from beaches to hill stations to back waters to Ayurveda to Culture and more. In a strange twist of irony, for a state which still has its ideological moorings firmly tilted to the “Left”, it is “smart marketing” that has played a great part in positioning the state as ‘God’s Own Country’ over the years. To its credit, certain gaps notwithstanding, Kerala does live up to this tag line to this day.

I’m certain that there are other states which are bigger in size in India that can provide a better offering than Kerala to tourists. Karnataka, for example. And some of them have now realized the potential, tourism as an industry offers and are boarding the bus, though late. The tourism circuit of Kerala over the years has evolved from just back waters of Kochi and hills of Thekkady in the 80’s to now Kumarakom, Alleppey, Munnar, and spots in Malabar area like Wynad, Bekal,… Outside of this circuit are a few places that are in the verge of earning their stripes. Of them is Vagamon, a hill station in the Idukki district and closer to Kottayam in terms of access, which I had the opportunity to visit last week.

Being a native of Kottayam, I have had the chance to visit Kottayam many times. It was the default summer vacation option while growing up. And with family roots still entrenched there, social visits have been a regular. Though Vagamon is just 40 Kms from our place in Kottayam, we never thought of exploring this location in the past. Not just familiarity, but proximity also at times breeds contempt isn’t it? Having been hearing of this place as an emerging hill station, we decided to visit Vagamon and spend a night there during this trip.

For long, Vagamon was mainly known for its milk – Vagamon milk is popular in the surrounding areas. Like all hill stations of India, though the British were the ones who discovered this place, I understand that it is the Christian missionaries in Kerala who developed Vagamon and among the first to live there. A Dairy farm that still exists was the early business activity to flourish and hence the popularity of Vagamon milk! So one can say that it is a place where honey and milk literally flows! The road leading to Vagamon from Kottayam is patchy having been battered by the recent heavy rains. For a Mumbaikar used to pot holed roads resembling craters of the moon, they were still bearable, but then Mumbai is no bench mark for a tourist destination! As you near the place, the scenic beauty of the place and the accompanying chill weather just enthrall you. The views on the way give you an idea of what to expect.

The resort where we stayed (Treebo Adrak Summer Sand Resort) is right at the heart of the town and has fantastic views. Located next to the Pine Valley which is one of the places of tourist interest, is neat, clean and very well maintained. The property is great and picturesque. However, for such a nice property, the staff is inadequately trained and is marred by slow and laidback service. We see this dichotomy in many small towns in India.

All places of visitor’s interest are in a span of 5 Kms which include breathtaking viewpoints, idyllic Tea estates, the Dairy farm, the Pine Valley,… and could be covered within few hours. Being a fledgling tourist destination, the infrastructure is just developing. One of the popular viewpoints has now become a paragliding point where frenzied construction activity is going on. I realized that as of now, Vagamon is more of a one day outing place for those nearby during holidays and long weekends. The result – all the points of interest were overcrowded and vehicles parked alongside the narrow roads clogging the approach. The Prime Minister’s Swachh Bharat Abhiyan was tottering, with people who bring food along eating alongside roads and littering the place with plates, cups and left over food! This was sad for a state which I always thought was in the forefront of Swachata. Though declared a plastic free zone, plastic could be freely seen strewn in places where people thronged.

The 3.5 hour drive back to the Kochi International Airport, half of which is through hilly terrain is quite scenic. Airtel 4G connection of mine failed the test, as in many places my phone was out of coverage. On the other hand, our cab driver’s JIO connection passed with flying colours when we need to access Google maps. Not to mention of the equally effective cell phone coverage of BSNL in those far off areas! The drive through also gives an insight on why the “Left” is so well entrenched in Kerala. Red flags flutter in regular frequency in a gap of 10-15 Kms even in those remote areas. Even in a non-election season like this, there was a nukkad meeting going on being addressed by a spirited leader with at least a 100 keen listeners! But one cannot dismiss the flowering of the Lotus here and there. In fact, the day we were leaving Kochi, BJP was kicking off its “Project Kerala” in Kannur with Modi as the main face in posters alongside the Kerala BJP President Kummanam Rajashekaran, who incidentally resembles Modi in some angles. Yet, it will take years of labour to dislodge the Left from probably its last bastion in India!

With Nature in abundance, Vagamon has immense potential to be the next Munnar or Kumarakom of Kerala. Additional place of interest for Westerners is a place called Bharananganam which is on the way from Kottayam to Vagamon. It is the abode of Sister Alphonsa who was the first woman of Indian origin to be canonized as a Saint by the Catholic Church. But, to get into the God’s Own Country circuit, Vagamon needs to be developed in terms of its infrastructure. Incidentally, the same day I saw a quote of the new Central minister for Tourism Alphons Kannanthanam who hails from Kerala, talking of Vagamon in the same breath as Munnar as an area to focus for tourism development.

The jury is still out as to whether development happens first and then tourism picks up or the other way about. But there is always a tipping point. Like for Kumarakom, when in the last week of December in the Year 2000, the then Prime Minister Vajpayee decided to ring in the New Year at Kumarakom. The musings of Vajpayee from Kumarakom still reverberate in the air! Similarly, another event that catapulted Kumarakom to its today’s glory was Arundati Roy’s Booker prize winning novel “The God of Small Things”. Set in the village of Aymanam which is at a calling distance from Kumarakom, the novel made many Western tourists include Kumarakom part of their itinerary!

May be Prime Minster Modi, who in his last Mann Ki Baat address called upon people to explore new destinations in India to boost tourism, could emulate Vajpayee and take a break at Vagamon during Diwali! Who knows, in that calm, cool and scenic setting far away from the political nerve centre of Delhi he may discover some new ideas to bring back John Maynard Keynes’ “Animal spirits” of the country!!!